Workers’ Compensation Insurance

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Most businesses have at least one employee, and many companies have hundreds, or more. Employees provide valuable services to their employers, and some organizations might find it difficult to function without them. While employees are important to their employers in many ways, if an employee is injured in the course of work, an employer can become responsible for the injured employee’s medical bills, costs for rehabilitation and retraining, and other related expenses, which add up quickly. To avoid financial difficulties in the event of an employee injury, companies should make sure that they have adequate workers’ compensation coverage. An independent insurance agent, knowledgeable about current workers’ compensation insurance, laws, and the concerns of local businesses when it comes to purchasing commercial insurance coverage, will guide them in choosing the right premium plan.

Depending on the structure and services or goods provided by a particular business, their commercial insurance needs may vary. Different businesses have employees that perform various tasks, from driving company automobiles, to operating heavy equipment or machinery, to meeting with customers on a daily basis. Because companies have diverse means of operating, and workers that perform a variety of jobs, they need workers’ compensation insurance suited to their unique business and its employees. An independent insurance agent will review numerous factors to evaluate the payment options for workers’ compensation insurance that fit the requirements of a particular organization.

workers-compensation-insuranceIn meeting with a local independent insurance agent, business owners may be asked about the nature of their workers, including employees’ previous work experience, daily work expectations, and the functions they perform. A seasoned independent insurance agent might also inquire about a company’s practices when it comes to risk management, along with safety measures in place at their office or facilities, and the kind of employee education provided to workers. Based on a company’s practices and structure, an independent insurance agent can recommend the right workers’ compensation insurance to go along with their commercial insurance coverage.

An independent agent will take the time to discuss the company’s payroll audit program and what the insured might expect. The agent might talk about the necessity to promptly report claims and possible fines if not done correctly. That agent will ask about the number of states in which the operations might occur and the payrolls and classifications per state.

With the assistance of a trusted independent commercial insurance agent who understands the needs of local business owners in respect to protecting their company from liability exposure in case of worker injury, those owners can learn more about workers’ compensation coverage which is set mainly by statute. With proper workers’ compensation insurance in place, business owners know that in case an employee is injured in the course of work, their company and its assets are secure.

Worker’s Compensation Insurance History

Workers’ compensation insurance is meant to provide coverage for an injury suffered, or disease contracted by an employee during the course of work.  It is based on the idea of “no-fault” insurance, and is meant to provide benefits for wage replacement, medical treatment, and physical and vocational rehabilitation costs to an injured employee in exchange for the injured or ill employee refraining from bringing a lawsuit.  Some state laws impose a limit on the amount of money that an injured worker can receive from his or her employer, and many prevent coworkers from being held accountable for workplace accidents; nonetheless, it is important for companies to maintain comprehensive workers’ compensation coverage in their commercial insurance.  A local independent insurance agent will guide business owners through the process of choosing the right policy payment plans.

Workers Comp Insurance

According to some, the history of workers’ compensation dates back to the law of Ur in ancient Sumeria, and the Hammurabi Code.  In the United States, the first movements to organize workers began in the early twentieth century, around the time that Upton Sinclair wrote “The Jungle.”  In 1906 and 1908, Congress passed the Employers’ Liability Act.  New York, Massachusetts, Maryland, and Montana all tried to pass workers’ compensation acts around that same time, but these either failed, or met limited success. The federal government tended to leave the issue of workers’ compensation to the states; however, because the federal government controls interstate commerce, some say that the 1908 law to cover injuries to workers employed in interstate trade was the country’s first workers’ compensation system.  The first comprehensive state law was passed in Wisconsin in 1911, and 36 other states passed similar laws from 1911 to 1920.  In 1948, Mississippi became the last state to enact a workers’ compensation law.

Workers' Compensation InsuranceMany states mandate that employers purchase workers’ compensation coverage with their commercial insurance.  States also have funds for cases involving a claim by an employee where an employer illegally fails to have insurance.  In most states, claims are handled by state compensation boards, although in some, they can be appealed to higher civil courts.  Cases turn on the definition of a “compensable injury.”

Federal workers’ compensation statutes apply to federal employees, or employees working in interstate commerce.  The Office of Workers’ Compensation Programs (OWCP), created in 1916 for purposes of administering claims of federal employees under the Federal Employees’ Compensation Act, administers acts including the Federal Employment Compensation Act, the Longshore and Harbor Workers’ Compensation Act of 1927, the Black Lung Benefits Reform Act of 1977, and the Energy Employees Occupational Illness Compensation Program.

workers-compensation-business-insuranceIn purchasing commercial insurance coverage for their company, it is important for business owners to be familiar with the history of the workers’ compensation system.  This way, they understand why most states require employers to have workers’ compensation insurance.  An experienced independent insurance agent can discuss workers’ compensation insurance with business owners and assist them in selecting coverage.  Then, in the event that a worker becomes ill or injured in the course of work, with adequate workers’ compensation coverage in place, business owners can protect their business’s assets and ensure that their organization can continue to function.  Companies should reach out to a local independent insurance agent to make sure that their commercial insurance policy includes workers’ compensation coverage.

Worker’s Compensation Insurance

Unless they are a solo proprietor, business owners know the importance of their hard-working employees.  But, in fields from healthcare, to construction, to education, workers perform a variety of tasks each day, which subject them to a many different risks.  Whether it is a laboratory technician who is exposed to hazardous fumes, a window washer using a harness that snaps, or a garden center worker gouged in the eye by a wayward branch, employees get hurt on the job.  To make sure that their business can avoid becoming financially and legally responsible for harm to a worker from an accident or exposure at work, company owners should reach out to a licensed independent commercial insurance agent to learn about their existing workers’ compensation insurance, or buying a new policy.

In connecting with an experienced independent business insurance agent, employers can expect that he will discuss how workers’ compensation insurance can provide benefit payments to workers who are injured or become sick in the course of their work.  He will explain how workers’ compensation coverage can take care of expenses for an employee’s medical care, cover wages for lost time at work, and pay for the costs of rehabilitation and retraining.  Depending on the circumstances, workers’ compensation insurance can also afford disability benefits to a temporarily or permanently disabled worker, or, in the case of an employee death, to that employee’s surviving family members.  By discussing the purpose of having workers’ compensation coverage for employees, an independent insurance agent can help business owners gain an understanding of how it fits their company’ needs as well as filling their statutory requirement.

insurance-agent-independentAn independent insurance agent will also explain who is typically covered under a workers’ compensation policy, including full- and part-time workers.  Coverage can vary between states by statute, but in some states, partners, officers, and even business owners can also be covered under workers’ compensation insurance.  An independent agent, familiar with local laws concerning workers’ compensation benefits, will serve as a valuable resource to advise company owners on questions that arise.

In the course of meeting with business owners, an independent business insurance agent will likely inquire about the number of workers employed by a company, and will want to know about each employee’s individual work history, duties and tasks, and usual work schedule.  He will want to know if employees operate any equipment or machinery at work, whether they drive any company owned motor vehicles, and if they are required to wear any kind of special garments or accessories for safety purposes, like protective lab coats, goggles, or gloves.  He might also ask about whether an office building has centrally monitored security and fire alarm systems, and, if employees work with hazardous vapors, liquids or other materials, whether there is an eyewash or drench shower near their work space.

There are many factors to consider in pricing workers’ compensation insurance, from employee safety training, to potentially hazardous materials encountered in the course of a workday, to various other dangers that might be present in any office, warehouse, or other place of business.  A local independent commercial insurance agent will guide business owners in choosing adequate pricing programs for their company.  With workers’ compensation insurance through a trusted independent insurance agent, employers know that in the event an ill or injured worker files a claim, their business and its assets can remain secure and they will avoid fines.

Workers’ Compensation Insurance Fraud

The workers’ compensation system was designed as a means to provide workers injured on the job with monetary awards to cover lost wages, medical expenses, and the costs for physical and vocational rehabilitation.  Most states require employers to purchase workers’ compensation coverage with their commercial insurance, and most states have workers’ compensation boards in place to handle employee’s claims.

Because of the large scale of the workers’ compensation system, and since it involves workers, employers, attorneys, doctors, and others, this leaves open the opportunity for fraud.  While business owners should make sure that their commercial insurance affords coverage for workers’ compensation claims by employees who become ill or injured on the job, they should also be aware of the possibility of workers’ compensation fraud.  An independent insurance agent, familiar with the workers’ compensation system, can assist business owners in understanding and averting the potential for fraud when it comes to workers’ compensation insurance.

In most states, workers’ compensation is a “no-fault” system of insurance, in that an employee harmed in the course of work does not need to show that his or her illness or injury was caused by an employer’s act or omission.  But, as any seasoned independent insurance agent knows, workers’ compensation fraud can occur in a variety of instances.  For example, a person may exaggerate his or her illness, fabricate ailments entirely, or claim that an old injury actually occurred recently on the job.  In some cases, attorneys or physicians have even worked with employees to create an elaborate scheme for seeking workers’ compensation benefits.  An independent insurance agent will explain the kinds of fraud that employers might observe, and will assist them in choosing a commercial insurance policy with workers’ compensation coverage suited to their unique business’s needs.

The agent or company might suggest an aggressive return to work program, which could involve some light duty.

Employees and others have various motives for engaging in workers’ compensation fraud.  Those range from receiving benefit payments, to taking time off work, to paying off debt.  An independent insurance agent will describe how employers can be vigilant about preventing workers’ compensation fraud.  And, a trusted independnet business insurance agent can also explain the importance of ensuring that employers pay the workers’ compensation premiums that they owe for each employee to avoid future legal or tax consequences.

With the assistance of an independent commercial insurance agent, business owners can purchase workers’ compensation coverage for the first time, or evaluate their existing insurance to make sure that their company is protected.  By having commercial insurance that includes workers’ compensation insurance coverage for their employees, and becoming familiar with the signs of possible workers’ compensation fraud, businesses can safeguard their assets and resources in case of a claim.

Worker’s Compensation Statistics

Workers’ compensation is a system of “no-fault” insurance designed to allow employees who are injured in an accident on the job, or become ill as a result of working conditions, to receive money benefits to cover lost wages while they recover, medical and rehabilitation expenses, and other costs.  Business owners in most states are required to purchase workers’ compensation coverage with their commercial insurance policy, and to pay premiums for their employees.  An experienced independent insurance agent can explain the options for workers’ compensation insurance available to local business owners.

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The Federal Occupational Safety and Health Administration (OSHA) performs workplace inspections and can issue citations and fines to employers for workplace safety violations.  OSHA has 10 regional offices, and 90 local area offices across the country, which means that they have an average of one compliance officer per 59,000 employees in the United States.  In 2011, OSHA conducted more than 40,000 federal inspections and more than 52,000 state inspections.  An independnet insurance agent can provide an overview of OSHA’s role in workplace safety, and help business owners make sure that their workers’ compensation coverage complies with necessary legal requirements.

A total of 4,609 workers were killed on the job, or as a result of a workplace injury in 2011.  This amounts to about 13 worker deaths per day, or close to 90 per week (2011).  One of the most dangerous fields for workers is construction (2011).  In 2011, 17.5% of workplace fatalities involved construction workers falling, getting hit by or caught in an object, or being electrocuted.  According to OSHA, employer safety violations that are most often cited include construction issues and fall protection, respiratory protection, hazardous energy management and control, ladders, powered industrial trucks, and machine guarding (2011).  A trusted independent commercial insurance agent will evaluate the hazards faced by employees of a particular business to help owners choose workers’ compensation coverage tailored to their business’s needs.

In 2011, close to three million non-fatal injuries and illness to workers were reported to OSHA, and over half of those were serious enough to warrant time off of work, transfer to a different job, or work-related restrictions.  These matters occurred at a rate of 1.8 cases per 100 full-time employees (2011).  Close to 2.8 million of the near three million total workplace injuries and illnesses in 2011 were injuries, and 2.1 million of those were to workers in service-providing industries (2011).  The other .7 million injuries were to goods-producing employees (2011).  Among state and local government employees, there were 5.7 cases per 100 full-time workers (2011), which is substantially higher than the rate of 3.5 cases per 100 full-time workers in private industry (2011).

With the help of a seasoned independent insurance agent, business owners can gain an understanding of common workplace injuries and illnesses, and learn about methods to decrease the potential for workplace accidents.  Then, in case of a claim by an employee, with quality commercial insurance with workers’ compensation insurance, employers know that their company and its assets are protected.

Do I Need Worker’s Compensation Insurance?

It’s required by law in most states. Workers compensation insurance protects employers in the event of an employee being injured in the course of employment.  By filing a workers compensation claim, an employee gives up their right to sue the employer for negligence.  In the event of an employee being injured while on the job, workers compensation insurance will cover the medical expenses incurred as well as lost wages from when the employee could not work due to the injury.  To learn more about how workers compensation insurance can protect a business, contacting an experienced independent insurance professional is an excellent way to gain more information.

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Whether a company’s employees working conditions are relatively low risk or they work in a more hazardous environment, considering workers compensation insurance is a smart move for any business owner.  An injury could occur from an activity such as lifting heavy equipment or simply slipping on a wet surface.  As a benefit that protects both the employer and their employees, looking into a workers compensation insurance policy is worthwhile.  To gain more knowledge about worker’s compensation insurance, a local independent insurance professional can provide more information about the details.

Workers compensation insurance is required by law in most states.  Additionally, the specifics of what is required may vary between states.  In order to learn more about what is the requirement for workers compensation insurance in a certain state, a local independent insurance agent can provide more information and guidance to a business owner.  An independent insurance agent is a skilled advisor who is happy to go over what options are available to a business owner, and help them determine what is a suitable option for their situation.

Many employers try to get around purchasing workers compensation insurance by declaring their workers to be independent contractors. If they truly are independent contractors this is perfectly legitimate, but for most workers fitting that description legally is quite hard.

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Not only is workers compensation insurance typically mandated in most states, but it also provides protection against lawsuits to employers as well as providing financial compensation to employees for wages lost and medical costs incurred from injury on the job.  To learn more details about workers compensation insurance and the requirements in the state of the company, business owners can contact a local independent insurance agent.  An independent insurance professional can address any questions or concerns someone may have with regards to workers compensation insurance.

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